By: mentawaisurf
16/10/2009
5:00 pm Yahoo! Profile:
mentawaisurf Did this message offend you?
Sign in to report abuse |
Reply to this message |
Lasty, if there's anything that we've learnt since the initial phase of the GFC it's that global economies have recoupled, in fact they never decoupled, and that deflation is now a world-wide trend. It was evident just how intertwined the global financial system has become when Wall Street tumbled and the world followed right along - in lock-step. The recent bear market rally also shows remarkable correlation in global indexes. We can expect no different as the next wave of crises unfolds in the US, regardless of Australia's supposed strong fundamentals.
Our RBA, like all central banks, do not have a plan. They merely follow the market set by government bond yields. They raised rates this month after the market yield rose in recent months. The market based their assumption of rising rates on the same economic growth and imminent inflation story that we all see everyday in every media outlet so it's now already priced into markets. When the market is surprised by the lack of growth moving forward, and realizes that the real threat is actually an unfolding deflation, then the market yield will fall and the RBA will be forced into another major backflip and follow by cutting rates. As a result the RBA will lose any remaining credibility, but by then we'll have bigger problems to worry about. |
|
By: lasty49
16/10/2009
3:32 pm Yahoo! Profile:
lasty49 Did this message offend you?
Sign in to report abuse |
Reply to this message |
Menta,
Your articles relate to the US.
We are in Australia.
Now FYG the RBA comments publicised in todays paper about currency and interest rates are very bullish.
In the past the RBA has been seen as coy about the direction of interest rates and currency in particular.
To me this is the strongest hint that I have ever known at what direction they will go and those betting against them should be very cautious.
Go with the flow Menta! As a surfer you should know not to fight against the rips ;-) |
|
By: mentawaisurf
16/10/2009
3:14 pm Yahoo! Profile:
mentawaisurf Did this message offend you?
Sign in to report abuse |
Reply to this message |
Everyone Thinks Interest Rates Are Going Higher;
http://finance.yahoo.com/tech-ticker/article/34524 0/Everyone-Thinks-Interest-Rates-Are-Going-Higher? tickers=xlf,dia,spy
But not while inflation is nowhere in sight;
http://finance.yahoo.com/news/Meltdown-101-Consume r-prices-apf-3721918995.html?x=0&.v=3 |
|
By: jaymarcel
16/10/2009
1:25 pm Yahoo! Profile:
jaymarcel Did this message offend you?
Sign in to report abuse |
Reply to this message |
| perhaps they just come hand in hand |
|
By: jaymarcel
16/10/2009
1:24 pm Yahoo! Profile:
jaymarcel Did this message offend you?
Sign in to report abuse |
Reply to this message |
What controls inflation & what does inflation control?
I've made some statements on here that I may be getting mixed up, my theory with investing in houses is that their prices along with income from renting them out will follow inflation & so will always give me a return equal living costs during my retirement but isn't the price of housing or renting a driver of inflation? Sorry if this seems like a silly question to the economically/financially educated but which one is the driver? |
|
By: lasty49
16/10/2009
12:12 pm Yahoo! Profile:
lasty49 Did this message offend you?
Sign in to report abuse |
Reply to this message |
ang,
"What is your take of inflation (short to mid term)? Enlighten me please."
Well Australia has some conflicting factors that may distort the inflation rate.
Strong AUD will weaken inflation.
Higher interest rates will support it.
Strong commodity prices in certain sectors will support inflation.
Inflation has fallen because of the interest rate component and petrol but go through your utilities bills and your weekly shopping dockets and you will see that underlying inflation actually is evident.
My view is interest rates are going up if thats what you are actually after. |
|
By: mentawaisurf
16/10/2009
12:03 pm Yahoo! Profile:
mentawaisurf Did this message offend you?
Sign in to report abuse |
Reply to this message |
Hugh's got the right approach - playing sound and secure and contented to live within one's means (what a novel idea :)
And don't worry Hugh, even our financial experts no longer understand the scope and risks of the derivatives market. Our shadow banking system has grown to be more than 20 times global output and has become such an arcane and opaque web that not even the world reknown expert, Satyajit Das, fully comprehends all the risks )although the one's he does keeps him up at night).
At the core of derivatives risk is counter-party risk. If just one of the major financial players fails then the whole system is jepodized (as we saw with the emergency bailout of AIG). So instead of diffusing risk, as was initially intended, derivatives became the breeding-ground for unfettered and unregulated financial engineering and rampant speculation. The result, an unprecedented financial bubble that has actually spread risk world-wide via our intertwined global financial system. Sorry Hugh, I hope you can still sleep at night.
http://www.wilmott.com/blogs/satyajitdas/index.cfm /2006/5/24/Fear-and-Loathing--WMD-or-What-are-Deri vatives |
|
By: mentawaisurf
16/10/2009
11:45 am Yahoo! Profile:
mentawaisurf Did this message offend you?
Sign in to report abuse |
Reply to this message |
| Lasty, you'd need to subscribe to Elliott Wave for their complete and insightful market analysis - including precise timing and pricing forecasts. What they post of their website, and what I've offered here, are merely pieces to the puzzle. They put the pieces together in such a way that it removes all the noise and confusion we are bombarded with every day so that it all makes clear sense (of both the big and the small picture). While the sceptics continue to dismiss them due to their unorthodox approach, as I once did too, the proof is in the pudding. So let me just say, it is the best investment I've ever made. |
|
By: firefly_au
16/10/2009
11:14 am Yahoo! Profile:
firefly_au Did this message offend you?
Sign in to report abuse |
Reply to this message |
Hi Ausguy:)
Hows things? I hope you and yours are well!
Thanks for that info - yes picking a good one out of that lot should be reasonably straight forward but will take a while he he :) With resource company investments particularly the juniors it is a different kettle of fish that investing in established business with proven performance and a lot depends on the success of their prospecting and assessed reserves of the commodity they are involved in digging up!
I have been watching ALK for some time because of their connection to the rare earths as well as gold and while their price movement has been +ve I would do better investing in JB hifi at the moment. As you say - it is a question of timing he he :) I will now monitor the others you suggest as well and keep an eye on the exchange rates as well.
Thanks again mate :)
BYE :) |
|
By: ang101000
16/10/2009
9:16 am Yahoo! Profile:
ang101000 Did this message offend you?
Sign in to report abuse |
Reply to this message |
Hi Lasty
What is your take of inflation (short to mid term)? Enlighten me please.
Hi All,
I write the way I do to make everybody think. If I write a simple story (avoiding using economic theory and jargon like: supply-demand, price elasticity, market equilibrium, etc.) for Jay I really don't want anybody to believe that it is some kind of investment advice. I make a point by o illustrating it with a simple story.
I remember writing the original story addressed to Jay, the reason for that is; he already stated he NEVER invest in gold or shares, he is to afraid to do so. So please boys, if you have shares or gold bars just keep those and be happy with your own investment decision.
That is the end of my take on gold. |
|
By: lasty49
16/10/2009
8:38 am Yahoo! Profile:
lasty49 Did this message offend you?
Sign in to report abuse |
Reply to this message |
hdmausguy,
" I know very little about them? What do you know about the risk of defaults with them? I don't see any comment about the trades at all? Is anything made public with them or is it all confidental dealings from within the banking system."
Thats my point.
We have people throwing around these numbers but they dont know the risk because its confined to each party and we arent privvy to that information. |
|
By: jadeshangrila
16/10/2009
8:24 am Yahoo! Profile:
jadeshangrila Did this message offend you?
Sign in to report abuse |
Reply to this message |
| Good story Ang, gold is a commodity like others, but it has been a tradition for being used as money in the olden days, due to it's beauty and rarity. However in my opinion crude oil is a more practical commodity and probably be a better bet in the short now that it is starting to move north. It is the greatest risk posed to the global economy as it's movement upwards will spark inflation and interest rate rise globally. A shortage of the liquid commodity will mean a double dip recession, projected to happen possibly in 2013 if no additional crude or energy source is found. |
|
By: jaymarcel
16/10/2009
8:19 am Yahoo! Profile:
jaymarcel Did this message offend you?
Sign in to report abuse |
Reply to this message |
| Hi ang, interesting take on gold, I was recently looking into it & like you made the decision to leave it to the rich & famous who worry about losing their vast millions. |
|
By: ang101000
16/10/2009
8:10 am Yahoo! Profile:
ang101000 Did this message offend you?
Sign in to report abuse |
Reply to this message |
Hi All (Hdmausguy),
here is what I think of gold (always expect the unexpected, idiot take on gold from me)
At the end of the i9th century, John Ruskin told the story of a man who boarded a ship carrying his entire wealth in a large bag of gold coins.
A terrible storm came up a few days into the voyage and the alarm went off to abandon ship. Strapping the bag around his waist, the man went up on deck, jumped overboard, and promptly sank to the bottom of the sea.
Asks Ruskin: 'Now, as he was sinking, had he the gold? Or had the gold him?'
Those who are into gold may find interesting to read PETER L BERNSTEIN 'The Power of gold The history of an obsession'.
If you only read charts and watch your portfolio gains all day that's fine with me but if you want the book I may upload it. Let me know. |
|
By: akdoc1
16/10/2009
8:08 am Yahoo! Profile:
akdoc1 Did this message offend you?
Sign in to report abuse |
Reply to this message |
hd; gold is no different to any other commodity and at present industrial demand is low.
http://www.ibtimes.com.au/articles/20090821/gold-d emand-down-toyear-lows.htm
Gold at times like now defies the laws of supply a demand, gold mines shares respond to percieved values and timing makes money not the fact that gold prices are rising.
Gold appreciates or depreciates but as far as earnings go there is none it is dead money unless sold at a big profit. A million dollars worth of gold earns nothing A million dollars in a bank produces some interest and that interest can far outwiegh the moneys gained through the appreciation of gold. This is why gold is for the rich, if you can afford to stash away a few billion in gold for safety you still have enough to live on and work with, most people don't so hoarding gold costs them money in the long run.
Any one buying gold with cash in the early 2000s would have seen appreciation double by now. Buying property that same person could have trippled a cash investment from appreciation and rental incomes over the same period so buying gold would have lost them money. |
|
By: jaymarcel
16/10/2009
7:51 am Yahoo! Profile:
jaymarcel Did this message offend you?
Sign in to report abuse |
Reply to this message |
| I agree with how you see it ang, it's sad to see people still think there is a direct link between financial richness & being happy, some spend their whole lives chasing it, I am only in it for a relatively short run, I am getting close to a situation of being able to own my house with no debt & an income without working to support my families required lifestyle, are you a financial chaser or are you getting close to financial freedom & happiness? That was a rhetorical question ;) |
|
By: jadeshangrila
16/10/2009
7:41 am Yahoo! Profile:
jadeshangrila Did this message offend you?
Sign in to report abuse |
Reply to this message |
| Ang, its is very true that in various culture like the Chinese, gold is use as dowry for the bride. However in modern China that is not enough the groom has also got to provide a house as well as a million yuan in cash in some cases for the bride's family. The hurdle to get wedded is a lot higher for the men especially in large cities like Shanghai. Thanks goodness my future Chinese son in law doesn't have to worry about that, he just has to finish his law degree. |
|
By: hdmausguy
16/10/2009
3:13 am Yahoo! Profile:
hdmausguy Did this message offend you?
Sign in to report abuse |
Reply to this message |
| 49 Re derivatives. I know very little about them? What do you know about the risk of defaults with them? I don't see any comment about the trades at all? Is anything made public with them or is it all confidental dealings from within the banking system? |
|
By: hdmausguy
16/10/2009
3:07 am Yahoo! Profile:
hdmausguy Did this message offend you?
Sign in to report abuse |
Reply to this message |
| ang - Just did some checks Re gold and India. 1 kg of Gold will cost you almost AUD $39,000. In India a reasonable wage is 423 rupees pw = $10 AUD pw. A kg of gold is equivalent to 75 years of Indian wages. Obviously gold is only bought there,individually,mostly in very small amounts, often like small petals which many are pinned to the brides dress. I disagree with your comment that gold is only the preserve of the rich. People from all walks of life invest in gold, silver platinum etc. This takes many forms including bullion,coins, ornaments & nuggets. For me gold shares may provide me with a pathway to economic freedom after a financially devasting divorce. Favourable economic event alignments only present themselves a few times in a persons lifetime. This seems to be one of those times. Have a look at my post last night to fire for a bit more about my goldies. When one does'nt have enough $$$$ to buy a place to live and does'nt want to take on debt,who would take on a 25 year mortgage in their late 50's & still be paying it off in their 80's? My plan is to try and capitalise on share market opportunities. If and when the $$$ runs are in the bank only then can I actually buy a place. Prior to that the rest is hot air. My options presently are thus, 1. Currently renting,2. Buy a place in a mobile village(30 - 40% $$$ of a house),3.Buy a unit/t-hse,4.Buy a house. Stay tuned for an update occasionally on my wealth ladder,I hope for nil snakes. |
|
By: hdmausguy
16/10/2009
1:01 am Yahoo! Profile:
hdmausguy Did this message offend you?
Sign in to report abuse |
Reply to this message |
| fire - Re gold & some info for you to follow up on. Gold in % terms in recent weeks has not risen a large amount. Like a rise from $1k to $1060 is only 6%. In AUD terms even with our rising $ it's kept within a $20 range. This will be more relevant to people who've recently bought bullion. Someone who bought their gold a couple of years ago for $700 or so should be less concerned. I don't have any bullion so that side of things is nil worry for me. As you probably know I'm out of the banks etc. & have been into gold stocks for 6 weeks. I targeted mid tier goldies advancing with production. My research shows their value will increase in line with their earnings. This will in turn see an increase in the share price. Any increase in the gold price I regard as a bonus. Goldies like many other listed companies usually multiply their share price multiple times under positive conditions. Gold looks set for a strong run for a number of years to come. For you to check here's the 3 companies,( nice gains already), I bought into 6 weeks ago with buy in & close today. CAH Catalpa 11.7c/16c, FML Focus 2.8c/5.4c & NGF Norton 20c/31.5c(Norton is in a trading halt until Monday,they've been hinting about some value adding on their assets for some time?)In the mid 80's I bought some ramping goldies(not too different to now)1 lot I bought for 12c and sold for $2.20 after 3 years( they got to $3.60 in 4 1/4 years. All these other mines I HAVE NO SHARES IN. Have another look at ALK Alkane Dubbo area NSW P M's & gold 3 Sept. 39.5c yesterday 47.5c. I'm wading through an Aust. site Junior Miners .com . An alpha listing of hundreds of mines. It takes ages to check them so it's a work in progress. I've only just finished "B". Only 3 from 36 looked to have potential so far. Adamus ADU (Ghana)47.5c, Allied ALD (PNG) 48.5c & Cga CGX (Philippines) $2.03. There you go fire that should keep you out of trouble for a while,good hunting. Oh yeah for price checks, 24h gold & USD index. |
|
By: ang101000
15/10/2009
11:34 pm Yahoo! Profile:
ang101000 Did this message offend you?
Sign in to report abuse |
Reply to this message |
Jay,
as you can see from the answers some are emotionally attached to bling bling.
Let me translate the economic mumbo_jumbo:
Rich (and I mean really, really reach Europeans with money to burn, you know the type with 20 houses, fifty cars and 5 girlfriends) are buying gold to protect their own wealth against inflation.
The rest of us ( you know mare mortals) are buying shares in the mining companies in hope that the rich will buy the gold that our mines produce...
Of course, we are also praying that Asian (mainly Chinese and Indian girls still demand at least one kg of gold ornaments from their future husbands on the wedding day. So in Aus, the miners dig up the gold, sell it and ship it as fast as they can.
You know what's coming, that is right!
There is an opposing view; there will be no hyperinflation so no need to stockpile the gold bars under the bed. Those who believe this to be true are watching the price of oil. Why? See, they think increased industrial production will require more and more oil (just like in boom times before the bust) thus increasing the price of oil. They say, we are far from full capacity production (they point at unemployment levels worldwide) so there is no reason to fear inflation let alone hyperinflation. Nobody (that's us) will be going to big shopping sprees (we save for the rainy day, the day we'll become unemployed).
Now, you know ..that's it; take your pick as to what you think is closer to reality (:
This was written for Jay, economists you'll get some econo-speak later. |
|
By: ang101000
15/10/2009
10:16 pm Yahoo! Profile:
ang101000 Did this message offend you?
Sign in to report abuse |
Reply to this message |
Hi Lasty,
ang,
'Yup and they are the ones who sold at the bottom and went into cash..'
I really mean what I write; ie
Sooner or later we (you and I may want to dump some (or more) of the shares from that 'speculative portfolio' and THAT IS when we need THOSE people...someone has to buy (:
I am not an angel just a dumb blond...
BTW are you reading my silly postings on Keens prediction. I put in an effort last night about statistics and expected at least a laugh from you.
Never mind, I like your one_liners, they are as sharp and lethal as a Samurais Full Tang Katana. |
|
By: firefly_au
15/10/2009
6:21 pm Yahoo! Profile:
firefly_au Did this message offend you?
Sign in to report abuse |
Reply to this message |
Hello Ausguy:)
Hold onto your dream mate - anything can and will happen in chaotic non linear systems - within reason of course. he he :)
I was wondering today with the A$ going like a rocket against the US$ and gold priced in US$ - how are shares in Ozy gold producers going?
I am still looking at buying stocks in a Gold producer at some point but it looks like the timing could be dicey.....
BYE :) |
|
By: lasty49
15/10/2009
5:36 pm Yahoo! Profile:
lasty49 Did this message offend you?
Sign in to report abuse |
Reply to this message |
"Derivatives, I saw written the other day was another time bomb with a massive $860 TRILLION dollars at risk."
Hmmm seems like another bear with a sorehead.
What needs to be assessed here is not the outstanding size but the rate risk that is held.
Many of these derivatives are offset say between 2 counterparties.
For example Bank A may be short gold 5000 contacts at 12000 against Bank B for 3 months. Bank A maybe long 5000 contracts at 14000 for 6 months against Bank B.
What is the actual exposure here?
Is it 10,000 contracts? Is it zero contracts? Is it price?
No doubt the alarmists would say $130 million. |
|
By: hdmausguy
15/10/2009
5:08 pm Yahoo! Profile:
hdmausguy Did this message offend you?
Sign in to report abuse |
Reply to this message |
| doc CONT - The massive worldwide debt has'nt gone away it's only been postponed. The longer they defer it the worse it gets. Eventually the chickens will come home to roost. Hyperinflation seems highly likely. The healthy Aussie real estate market will be ok along with the general economy as long as employment remains high. If & when the SHF and jobs start to tank then we'll have property defaults never seen before. I've seen estimates of 2 - 5 years for this to unfold? A collapse in real estate will see prices plummet. The main problem with the GFC is that the debts are of unprecended magnitude (particularly the USA)It's surely a case of too big to fix for at least a generation or two. The prediction that the USD will tank is now unfolding. Many commentators have predicted this stockmarket climb. There's plenty saying a reversal is due within a few months. More property defaults are looming in the USA in both home loans and commercial. Much bigger than the 2008 crash. In this severe downturn Australia won't escape. Derivatives, I saw written the other day was another time bomb with a massive $860 TRILLION dollars at risk. At the end of the day all these things are outside our control. For me I've planned as best I can for whatever comes along. Foremost I have eliminated all debt. I have some gold share investments & some cash in the bank. I rent cheaply & live well, so for me life's ok. I was daydreaming the other day about my gold shares going gangbusters and the fat profits that I made and the tanking real estate prices had me in a nice beachfront pad on the NSW MID N. Coast. I like beach fishing. |
|
